Qwest’s former investor-relations director Lee Wolfe testified today that he committed illegal insider trading but has received partial immunity.

His testimony came during the first full day of witness examinations in the insider-trading trial of former Qwest CEO Joe Nacchio, who is accused of dumping $101 million of Qwest stock shortly before the stock price tumbled. Wolfe is the first witness to be questioned.

From January to April 30, 2001, Wolfe exercised and sold 25,000 stock options for a pre-tax profit of $646,000, he said.

Wolfe said he knew what he was doing was wrong.

“The first sale was in January,” Wolfe testified. “It was wrong even in January. I was aware how critically important these one-timers were going to become to meet the numbers as we moved through 2001.”

“One-timers” is the term the government is using for nonrecurring revenue that Qwest booked in 2000 and 2001 to help meet financial targets.

“I knew deep down that I had material information in the form of the fact that we were using one-timers to make our numbers,” Wolfe said.

Wolfe said he had 20,000 stock options remaining after April that were worth roughly $825,000 if he had exercised them and sold the stock. He didn’t because he had “a crisis of conscience that said I should not do that anymore.”

Wolfe said he received partial immunity in the form of a “proffer letter.” He said the letter frees him from prosecution for statements he made to the federal grand jury that indicted Nacchio in December 2005.

Earlier today, Wolfe testified that from January to summer 2001, then-Qwest chief executive Joe Nacchio held 55 meetings with analysts and investors, telling them that Qwest would meet its aggressive growth targets.

Nacchio held those meetings even after Wolfe and other analysts questioned the company s ability to reach five-year growth rates Nacchio had forecasted for the combined Qwest and US West a year earlier, Wolfe said.

“There were a number of people questioning the growth rate,” Wolfe said.

Nacchio told analysts and investors Qwest would grow annual revenue by 15 to 17 percent after it merged with US West in June 2000, Wolfe said.

Prosecutor Leo Wise, from the Department of Justice’s Washington, D.C., office, is conducting the direct examination.

In December 2000, Nacchio held a last-minute conference call with analysts to reaffirm its financial targets for 2001 because “the stock was getting hammered,” Wolfe said.

After the call, Qwest stock shot up $5 immediately to about $37 a share, and the stock gained $10 over the next 10 trading days, Wolfe said.